Business

If you’ve had the opportunity to work with a company in an Asian country (and China, Japan, or South Korea in particular), you’ve undoubtedly observed a marked difference in the role of hierarchy in their culture. These countries feature a high power distance index (PDI) where “lower ranking individuals of a society accept and expect that power is distributed unequally”. For example, China has an high PDI of about 80 versus the United States’ PDI of 40 and Western European country’s PDIs of between approximately 25 and 40 (see PDIs by country).

In high PDI cultures, authority is centralized and subordinates are unlikely to approach and contradict their bosses directly; unfortunately, elevated PDI has an adverse impact on innovation. Research on the correlation between power distance and innovation has shown “a strong negative relationship between Hofstede’s dimensions of power distance and GII innovation scores as well as a strong positive relationship between individualism and GII innovation scores.”

Translation? If you can’t tell the boss he’s wrong, then bad ideas proliferate while good ideas stagnate.

However, many organizations are trying to break with traditional attitudes, promote flatter hierarchies, and encourage innovation. I got to see one such effort firsthand during a recent project working with Alipay in Hangzhou (we were enabling Alipay to use the Samsung Galaxy S® 5 fingerprint sensor to authorize mobile payments).

The key to Alipay’s strategy starts with a simple idea: how do people address each other in conversation?

The Chinese are very sensitive to status and titles, so you should use official titles, such as “General,” “Committee Member,” or “Bureau Chief” when possible.

and:

Most people you meet should be addressed with a title and their name. If a person does not have a professional title (President, Engineer, Doctor), simply user “Mr.” or “Madam,” “Mrs.,” or “Miss,” plus the name.

Every time you talk with someone in your organization, you are being constantly reminded of both their rank and your rank in relation to them. Hence Alipay’s tactic to change the cultural status quo: remove this constant reminder of a person’s rank from daily work.

The first thing a new Alipay employee does when they join the company is choose a nickname (typically a character from Chinese history, literature, or popular culture). From then on, that’s how people know them. No more “Director <name>” or “Manager <name>”; now it’s “Zhu Bajie” (a character from a famous Chinese literature classic) or “One Night” (???).

In practice, what I observed in my time at Alipay seems to speak positively of their efforts. Unlike other projects I’ve worked on in Asia, the project at Alipay was punctuated by a completely different dynamic. There was the kind of constant communication, rapid-fire discussion, and open back-and-forth disagreements that would be strikingly familiar to anyone from Silicon Valley.

What small hack could you put in place to change the culture of your organization?

Lately, I’ve been devouring Robert Kirkman’s “The Walking Dead”, a comic set in a post-apocalyptic zombie wasteland with a narrative focused on the daily lives of the non-zombie survivors. It sounds bleak, but it’s a good drama piece on how things fall apart in a crisis whose scale is beyond any individual’s comprehension.

I’ve started to see it as a bit of a parable for the current global situation and the probable future scenarios that await us: the constant hunt for food and shelter, and the vigorous and brutal means used to secure those same essentials. While most of the population of our world hasn’t turned into actual zombies, there’s a lot of parallels between our world and that of the comic.

Consider survival. Regardless of your current financial situation, you will be affected by the crisis and your ability to maintain your quality of life will face increasing strain. Are you prepared? I remain dumbfounded at the shabby state of Canadian and Americans’ finances, and individuals’ overall lack of restraint or planning. A quick run through the numbers courtesy of GreaterFool.ca shows that there are a lot of people out there who:

Lack of significant savings: According to Garth, seven in ten Canadians have no corporate pensions, sixty per cent have no money saved, and only five in ten have RRSPs. Of the fifty percent of Canadians that do have an active RRSP, the average amount saved is a little over $40K.

No sweat, I hear you saying, I’ve sorted my own finances out. Which is just fantastic – at least someone’s been thinking ahead. In preparation for the Financial Zombieland that awaits us, you’ve at least been stockpiling cans, guns and ammunition. You’ll at least make it past the first wave of the outbreak.

Unfortunately, the fallout of the crisis will last slightly longer than a winter storm that knocks out the power. It will also dramatically reshape our society – permanently. While your larder may be full now, I believe the breadth and depth of the crisis will conspire to drain your reserves slowly but steadily in a number of ways:

The safety net will slowly disappear: Governments, being borderline insolvent, will look to dramatically trim expenditures while expanding taxation. One only has to look at the four-year “plan” in Ireland, and the economic restructuring in England to get an idea of what’s on the horizon for previously government-provided social services.

Things will cost more: Anyone who’s been paying attention has noticed that resources are becoming more hotly contested. China is playing chicken with the IMF by gobbling up resource rights in Africa in exchange for infrastructure, a flagrant violation of IMF’s rules that require those rights to be used to pay each African nation’s outstanding debts. Not only will resources cost more, but demographics and entitlements will force governments to find new sources of revenue. Read that: raise taxes.

Growth will be constrained: The natural response on the part of consumers and companies will be to find ways to conserve cash. In the wake of the economic crisis, US savings rates have increased dramatically. Canadians, believing they’ve avoided the worst, have decreased their personal savings rates; however, this will change as it becomes clear that no one can escape the grasp of the global economic decline.

The upside of this reshaping of our society is that it might be just what we needed. Just as in “The Walking Dead”, this crisis may have an upside. If nothing else, it may force us to shuffle our personal priorities. Perhaps we’ll reduce our consumption, redefine how we work, and reverse some of the global destruction we’ve wrought.